FORD

Ford, partner to spend $11.4B on four new plants in Tennessee, Kentucky to support EVs

Memphis, Tennessee — In the single largest manufacturing investment in its 118-year-history, Ford Motor Co. on Monday said it and a partner will invest $11.4 billion and create 11,000 new jobs to build electric vehicles and batteries at two new, sprawling campuses in Tennessee and Kentucky.

In rural west Tennessee, Ford and battery manufacturing partner SK Innovation plan to build what would be called Blue Oval City. The massive campus would be situated on the Memphis Regional Supersite, a 6-square-mile greenfield site northeast of the city that the state of Tennessee and local officials have been working for years to prepare for large-scale development.

MORE:Why Michigan lost out on Ford's big investment.

The news is a blow to Michigan's claim to national leadership in the auto industry's pivot to electrification, signaling that the home of the Motor City might lag rival states eager to tout their lower industrial power costs, larger tracts of land for manufacturing development and more moderate climates.

Ford claims the Tennessee complex will be among the largest auto manufacturing campuses ever built in the United States. The $5.6 billion site on the outskirts of a small town called Stanton will employ nearly 6,000 people and support production of the next generation of electric F-Series pickup trucks as well as batteries.

Ford Motor Co.'s rendering of its planned Blue Oval City in west Tennessee.

It's envisioned to be what Ford describes as a "vertically integrated ecosystem" consisting of a vehicle assembly plant, a battery plant jointly operated by Ford and SK, as well as facilities for suppliers and battery recycling operations. Ford says the new assembly plant will be carbon neutral with zero waste to landfill when it's fully operational in 2025.

MORE: Jim Farley on Ford's EV strategy: 'We are taking the lead'

“West Tennessee is primed to deliver the workforce and quality of life needed to create the next great American success story with Ford Motor Company and SK Innovation,” said Tennessee Gov. Bill Lee, a Republican, in a statement. “This is a watershed moment for Tennesseans as we lead the future of the automotive industry and advanced manufacturing.”

Meanwhile, Ford and SK — via their joint venture, BlueOvalSK — plan to build the $5.8 billion, 1,500-acre BlueOvalSK Battery Park in Glendale, Kentucky, a small town in Hardin County in the central part of the state. There, some 5,000 workers will be spread across two battery plants that will support future Ford and Lincoln EVs built at Ford's North American assembly plants. 

Ford Motor Co.'s BlueOvalSK Battery Park would be built in Glendale, Ky.,  part of its largest manufacturing investment in the automaker's 118-year history.

In a statement, Kentucky Gov. Andy Beshear, a Democrat, said the investment was the largest in the state's history, and he added the project "solidifies our leadership role in the future of the automotive manufacturing industry. It will transform our economy, creating a better Kentucky, with more opportunities, for our families for generations."

Earlier this month, the state's Legislature passed a $410 million economic incentive package aimed at luring massive investment projects to the state. Using state incentives, Ford will be able to take advantage of up to $250 million in forgivable loans and $36 million of skills training investment.

The 1,500 acres will be transferred to the company. The funding and acreage are dependent on Ford fulfilling its end of the bargain hitting the jobs, wage and investment numbers promised to the state — which will be measured annually, said Larry Hayes, secretary of Kentucky's Economic Development Cabinet.

Production at the new facilities is slated to begin in 2025. Each of the three battery plants targets about 43 gigawatt hours per year of U.S. production capacity — enough power to drive 1 million electric vehicles, according to Lisa Drake, Ford's chief operating officer for North America."

"This is a major step up for Ford in the EV arms race as the Detroit stalwart is laser-focused on transforming as part of this green tidal wave," said Dan Ives, senior equity analyst at Wedbush Securities, in an email, as Ford's stock traded up more than 4% after market's close. "These four new plants are very strategic and the right move at the right time."

In a statement, Ford Executive Chairman Bill Ford dubbed the move a "transformative moment where Ford will lead America's transition" and said it will allow the company to "achieve goals once thought mutually exclusive — protect our planet, build great electric vehicles Americans will love and contribute to our nation's prosperity."

Of the total investment, Ford will contribute $7 billion, which it says is its largest manufacturing investment ever. The automaker has said it expects 40% to 50% of its global vehicle volume to be fully electric by 2030.

"The UAW looks forward to continuing our long-time partnership with Ford as consumers transition to make electric vehicles in the right way," United Auto Workers President Ray Curry said in a statement. "The UAW has always taken a lead in manufacturing innovation with our employer partners. We look forward to reaching out and helping develop this new workforce to build these world-class vehicles and battery components.”

The automaker also announced Monday that it will spend $525 million total in the U.S. over the next five years, starting with $90 million in Texas, to train skilled technicians to service digitally connected, electric vehicles.

The investments come amid a recent acceleration of Ford's push toward electrification. In May, Ford announced the joint venture with SK, and that it would increase its investment in electrification to $30 billion through 2025. 

Last week, Ford announced a $50 million investment in and partnership with a major battery recycling company. And earlier this month, the company said it would spend an additional $250 million to boost production of the forthcoming Michigan-built battery-electric F-150 Lightning due to higher-than-expected demand.

Why there?

In an interview with The Detroit News, Ford CEO Jim Farley said the site-selection process for the new EV and battery projects was not long but comprehensive, comprising hundreds of sites across the country. The moves mark an expansion of the automaker's footprint in Kentucky, where it operates two assembly plants, and a new presence in Tennessee.

Ford Motor Co. CEO Jim Farley stands next to the company's new Ford F-150 Lightning in Dearborn earlier this year.

The final decision came down to several factors. Chief among them: weather, energy costs, size, central location, economic incentives and the availability of skilled labor and renewable energy sources. Also critical was the availability of large sites to accommodate the sprawling campuses envisioned by Ford.

"When you did all that math, it got to ... anywhere from Michigan, Ohio, Kentucky, all the way to Tennessee — that area," Farley said. "We were open to all locations, but when we did the scorecard, it became very clear."

He added: "We didn't do it state-by-state; we literally did it site-by-site. And we scored all the sites, we went and looked at them. It was a very thorough, arduous process with things that we never considered before, like energy costs."

Sandy Baruah, CEO of the Detroit Regional Chamber, said in a text that “Michigan has competitive utility rates, but some other regions have lower rates due to infrastructure or natural advantages — e.g., the Tennessee Valley Authority or hydroelectric power in the Pacific Northwest can offer slightly lower utility rates.”

“Also, some states allow utilities to offer ‘Econ Development’ rates which provides the opportunity to offer a lower utility rate to attract new investment — MI does not," he texted.

“Ford’s MI investment in the last 5 years has been about $8B, including the F-150 Lightning — so I don’t think this announcement is cause for concern (for) future electric vehicle investment.”

In a statement, Michigan Economic Development Corp. spokesman Otie McKinley noted the organization's support of Ford's EV investments in the automaker's home state and added "the landscape remains competitive for automotive and EV manufacturing projects — and Michigan is up to the challenge."

"The MEDC looks forward to working with our partners across state government, the legislature, our utility partners and our regional partners to continue to make a strong case for Pure Opportunity here in Michigan," he said.

Meanwhile, state and local officials in Tennessee, accustomed to seeing a growing automotive presence in central and southeastern portions of the state, have been preparing the Memphis Regional Supersite for such a project for years.

“There’s been quite a bit of money invested," said Mark Herbison, president and CEO of HTL Advantage, an economic development organization that represents Haywood, Tipton and Lauderdale counties in west Tennessee. 

This EMS & fire station was built in west Haywood County to support an industrial investment. Ford Motor Co.'s new Blue Oval City campus will be built there and include an assembly plant, battery production and supplier park.

"We relocated the state highway and four-laned it. We built a new interchange at the interstate. We have built one of three million-gallon water towers that’s going to be located on the site," he said. A new sewer system is being installed, and work recently was completed on an on-site emergency management station that will be staffed by paramedics and firefighters. 

Blue Oval City will be built on what's known as the Memphis Regional Supersite, located about 50 miles northeast of Memphis and 40 miles southwest of Jackson, Tennessee. The site is located in Haywood County, which is unincorporated save for two towns: Stanton and Brownsville, the county seat.

The site touches Stanton, a small, rural community with just a few hundred residents. The town is dotted with Baptist churches and homes. Along and near the main stretch there's a post office, a Dollar General, railroad tracks and a health clinic.

Cotton is grown on a site in west Haywood County where Ford Motor Co. will build its new Blue Oval City campus that will include an assembly plant, battery production and supplier park.

The county has a population of just over 17,000 people, according to the U.S. Census Bureau. But it borders Tennessee's most populous county, Shelby, home to Memphis and nearly 1 million residents.

Local economic development and government officials tout the Supersite's size — they believe it's one of the largest industrial sites in the country — and its location, just off Interstate 40 and close to a freight railroad. They also tout the infrastructure that's been put into place to support development there, including electricity supplied by the Tennessee Valley Authority utility company, and its proximity to the urban workforces of Memphis and Jackson.

HTL Advantage recently commissioned a labor analysis from the same company that studied the labor market ahead of Toyota Motor Corp.'s decision in the 2000s to locate a plant near Tupelo, Mississippi, which is less than a two-hour drive from Haywood County. The study, Herbison said, found that within a 45-minute drive of the site, there are about 1 million people, some 200,000 of whom have automotive manufacturing skills and another 200,0000 with skills needed to work in battery manufacturing.

"You'll have people that will live all over the region coming to work at the site," he said. "We've got a large, abundant urban workforce."

The workforce has been bolstered, too, he said, by Tennessee's investments in vocational training and a free community college program. Still, the campus would be the region's first vehicle assembly plant operation, he said, though west Tennessee is home to some automotive suppliers and other large manufacturers.

“We do believe that there’s going to be people moving into the region for these types of jobs, the types of supplier jobs that will come along with this facility," Herbison said. "Because we’ve seen it in Chattanooga, we’ve seen it in Spring Hill, we’ve seen it in Smyrna with Nissan."

'A godsend'

Nestled in the hills of central Kentucky lies 1,551 acres of state-owned land covered in part by verdant rows of soybeans. Soon, they’ll be replaced with concrete and machinery as it’s transformed into the new home of two battery plants operated by Ford and its partner, SK.

The state of Kentucky bought the site in 2002 with the intention of luring Hyundai to build an assembly plant. Instead, the company built the factory in Alabama, and multiple other attempts to recruit companies to take the spot have failed over the last nearly two decades.

Located on Main Street, the Whistle Stop is one of the big draws for Glendale, Kentucky, where the economy is largely tourism-based.

Hayes said it’s clear there’s been a payoff for waiting for the appropriate “mega-project.”

“We certainly could have pursued projects that would liked to have located there, but it just wasn’t that project that was really going to move the needle,” he said. “Lo and behold, I think preserving that site, and the discipline of waiting for the right opportunity with the right customer — it couldn't be better.”

He said he understands, too, from the state of Michigan's perspective "what it's like not to be the one that's chosen." But he noted Ford's presence there remains significant: "What's good for Ford, in this venture or wherever, is going to be good for Michigan."

State and local economic development officials in Kentucky, who have been pitching Ford for nearly a year on the site, say it will be a game-changer.

“There’s a difference between a job and a good job. A good job is a job that I equate to people raising their families and sending their kids to school and putting clothes on their backs. And those are the types of jobs we have strived to locate here,” said Rick Games, president of the Elizabethtown Hardin County Industrial Foundation. “It will change the community, there’s no doubt.”

When it opens in 2025, the Battery Park will produce 86 gigawatt hours of battery cell capacity annually across the two factories. It will be a veritable earthquake for next door Glendale, the tiny unincorporated town that abuts the land.

Locals estimate it has around 400 year-round residents, but there’s no way to tell for sure — it’s swallowed up in the Census count for nearby Elizabethtown, which has an estimated 30,000 people.

Tourists and honeymooners stop at the tree-lined main street to shop for antiques, attend the annual Crossing Festival or eat at its famous restaurant specializing in southern fare, The Whistle Stop. The surrounding areas are largely farmland and the U.S. Army’s Fort Knox and the City of Louisville lie to the north.

Grandma's Bluegrass Kitchen owner Donna Mattingly, 65, of Elizabethtown, commonly known as "Grandma," talks about the quaint setting of Glendale, in Glendale, Kentucky, on Sept. 27, 2021.

Donna Mattingly, 65, has lived most of her life on the outskirts of Glendale, which she described as “very country.” In all that time, she said, it’s barely changed. Rumors have been swirling in town for years about what would land in the massive industrial zone, and many locals had heard the state had closed a deal.

“It’s going to be some kind of industrial business. And that might take away from the little community area,” Mattingly said.

But she also said it would be a welcome boost to a community that’s struggled through the tourism slump of the pandemic. For years, she’s made jams, salsas and pickles and sold them to wholesalers, restaurants and craft fairs. She recently opened up a sandwich shop, Grandma’s Bluegrass Kitchen, just across the highway from the future battery plant site: “That would make my business grow.”

Mike Cummins, 65, of Glendale, said he will be interested to see if the investment in the industrial site long in the works comes to fruition in Glendale, Kentucky, on Sept. 27, 2021.

Mike Cummins, 65, moved to the area nearly 20 years ago to buy and manage the Whistle Stop. He and wife Lyn sold the restaurant in March to retire, but they still live a block off the main drag. The historic downtown area will be protected from commercial development, he said, so a big industrial development nearby would only be a positive thing.

“It’ll just enhance the businesses, the property values. There will be things moving in this area. So it’s a plus for Hardin County,” Cummins said. “I think it’s a godsend.”

'Dream come true'

On Sunday, Haywood County Mayor David Livingston got the call he's been working toward for 17 years: Ford would be the company taking over the site painstakingly assembled from farmland that his and other Haywood County families tended for generations.

Mayor of Haywood County, David M. Livingston, 66, stands in front of Memphis Regional Mega site water tower that will support Ford Motor Co.'s Blue Oval City campus on Fredonia Road in west Haywood County, Tennessee.

Since 2004, Livingston, 66, has been involved in local efforts to prepare the site for development. His own family — whose roots in Haywood County date back to the mid-19th century — sold a 700-plus-acre parcel of land to the state as part of the process. He's always envisioned a manufacturing site taking the place of cotton, soybean and corn fields that now comprise the property.

“It’s one of these situations that it’s hard to convince everybody, but for the good of the county and the good of the region, it’s essential that we come together and do this," Livingston told The News. Such a project is essential, as he sees it, for the survival of a community whose economy remains deeply tied to agriculture, as one of the state's largest cotton producers, even as agricultural employment has fallen and other manufacturers have expanded in the region.

"We feel like this is going to be the key that turns all of west Tennessee around," he said.

He's determined, too, that the project will benefit all of Haywood County. He's working, for example, on ensuring there are transportation options for people who work on the campus.

About a month ago, he got word that the vision he and others had nurtured for years finally was coming to fruition, and he's had a smile on his face ever since. He becomes emotional even recalling the moment he learned the user would be Ford.

"I became mayor in 2018 for this purpose," he said. "And what we've seen, when you work on something for 17 years — it's a dream come true."

jgrzelewski@detroitnews.com

Twitter: @JGrzelewski

rbeggin@detroitnews.com

Twitter: @rbeggin

Staff Writer Breana Noble contributed.